Affiliate Window is the oldest network still operating in the UKPhysically the largest network in the UK – the most advertiser clients and staff, over a third of which are client-facing.£1.5bn/€1.74bn is the amount of online trade we tracked last year – this represents a third of all affiliate sales in the UKIn 2010 we joined the zanox family.

Some of the growth that we see online is exaggerated due to a) shifting consumer shopping patterns. A price-conscious, deal-savvy public fuels online shopping where comparisons and incentives are easier to find; b) more new users shopping online; c) those that spent online in previous years returned to spend more in 2010.

Growth is in transactions YOY for Q4

UK retailers start earlyAmazon brings UK in line with the US tradition of holding Black Friday after Thanksgiving – preceded by 5 days of time-limited, stock-limited ‘Lightening Deals’.Manic Monday – last Monday in November, predicted in the press to be the biggest pre-Christmas sales day – straight after pay day and fuelled by early discounting by major retailers, as was the case in 2009.

Commissions

Blue – TransactionsRed – Sales revenueGap due to last order dates at various points in this period. When we look at the top performing promotional methods we will include this period

Conversion rates and AOVs

By advertisers sector, 6th December – 4th JanuaryClothes are a popular gift for anyone and Affiliate Window is strong in the fashion sector. Gifts, gadgets &amp; toys would not usually be in the top 10 were it not for ChristmasHome &amp; Garden benefits from post-Christmas salesFood incorporates confectionary

By publisher promotional method, 6th December – 4th January

Email broadcasts generate a big ‘hit’ of transactions but peaks and troughs characterise this method of promotion.

Peak close to last order day because paid search publishers use this call to action in their ad copy

Price comparison figures in a lot of purchase paths but is often not the last referring channel.

Therefore publishers have to focus on key period in early December whilst preparing for ongoing post-Christmas sales as retailers respond to intense competition in this period by varying their sale start datesFlexibility regarding timing and commissions (including tenancy, prizes, mobile or offline deals via apps)One particular anomaly about Christmas 2010 was that the UK suffered heavy snow from 24th November – 26th December. This reduced footfall on the high street but also meant that many online orders suffered delayed delivery. Last order date – mobile lesson from Nectar

Budgeting in the build up to the Christmas rush is vital. With a number of publishers vying for increased commission for extra coverage across their sites to capitalise on this key trading period, it is important that increased commissions are taken into account. Publishers with highly trafficked sites are also likely to push for fixed tenancy deals – which takes affiliate marketing through these channels beyond a pure cost per acquisition model. This needs to be accounted for within your budget.Benchmarking across other channels is vital to ensure that the affiliate channel continues to be a cost effective one

Messaging is a key component for an advertiser to stand out from the crowd. This can be in terms of their offer/commission structure to publishers to the messaging that they are using to attract customers.Calls to action and time based offers work well. Let customers know about your final delivery dates for products to arrive in time for Christmas for example. A consistent message needs to be portrayed on the site. When the site remains consistent with the creative that was interacted with, conversions are likely to increase. If customers click through to an offer that is not available when they reach the site, this may result in a customer leaving the site and looking elsewhere.Co-branded landed pages are currently under utilised by advertisers. These can be used to help keep consistency and build up trust between the customer and the publisher site.

Examples of co-branded landing pages. Consistent message builds up trust in the affiliate site

The run up to Christmas will naturally see uplift in sales. Advertisers need to benchmark how much of the uplift is down to seasonality and what is down to additional, incremental sales driven by publishers. By paying publishers additional for sales they could have potentially generated anyway there is a clear over incentivisation of publishers.For advertisers, looking at an increase in sales is no longer enough. It is important to model and understand what the actual cost is of this activity.This presents an opportunity for publishers who are able to demonstrate additional value as I will cover further when I go on to speak about the opportunities.As well as there being the potential for advertisers to over incentivise their publishers; there is also the possibility of publishers over incentivising their customers. With a number of offers available, publishers should really target their customers effectively. By going with a scattergun approach and sending all offers out to call customers irrespective of their demographics, publishers run the risk of over incentivising their customers and ultimately result in not generating sales. A carefully thought out strategy can help publishers reach the right audience, with the right product at the right time.

Importance of the longtail – especially over the Christmas period.Collectively a top affiliate in their own right

Red Letter Days – Engaged with the longtail effectively in their Christmas promotion

Mobile sector – reliance on top 10 affiliates decreased year on year

Mobile is a key trend. For years we have heard of the year of the mobile but 2011 has really seen mobile take offLots more advertisers are engaging with mobile commerce and this has been facilitated by affiliates developing apps.Mobile helping close the loop from online to offline and vice versa

If a customer was on the high street they would be able to launch the Vouchercloud app and get an exclusive 10% off. This was a single-use code, redeemed by staff at POS. This was then tracked back into Debenhams’ internal database and attributed to the affiliate channel, and to Vouchercloud as the affiliate. So they were able to close the loop so that the redemption was tracked in store, reported back to the Debenhams sales database, and then attributed to the affiliate channel.Now the results. Affiliates drove 43% of total sales in store and online. 57% were redeemed in-store rather than online, so a great way in which online customers can translate to offline. 70% of the new customers the campaign produced were driven through affiliates. Debenhams have just released their mobile optimised site so can work in additional ways to drive mobile sales

Opportunity for publishers that are able to demonstrate the value of their traffic.Customer profiling is keyAdvertisers are looking beyond just sales volumes. Potential for affiliates driving better quality customers (new vs existing, higher basket values etc) to get better commission rates

Transcript of "The Vital Quarter – How UK Performance Marketers Prepare, Act and Analyse over the Christmas Period"

3.
Overview of the q4 trading period in the UK market<br />£6.8bn (€7.8bn) spent online during December 2010 (source)<br />Up 7% on November; up 25% on December 2009 (source)<br />20% of the UK’s retail sales are generated in November and December (source)<br />62% of online consumers shopped online on Christmas Day or Boxing Day (source)<br />22% of online consumers used their mobile device (source)<br />BUT…<br />45% of those who shopped online encountered website problems while doing their Christmas shopping (source)<br />32% abandoned purchases as a result (source)<br />26% of those who did ordered before the last delivery date did not receive their goods in time (source)<br />

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<ul><li>Monday 22nd November : Amazon commences five days of ‘Lightning Deals’.

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Friday 26thNovember: Amazon brings ‘Black Friday’, a US-tradition following Thanksgiving, to the UK for the first time.

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Monday 29thNovember: ‘Manic Monday’, expected to be the biggest pre-Christmas sales day</li></li></ul><li>Week peaked on Wednesday 1st December<br />‘Manic Monday’ actually second quietest day of the week for commissions<br />

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Monday 6thDecember: The first Monday in December is the traditional peak for online trading in the UK<br />Monday 6thDecember: The first Monday in December is the traditional peak for online trading in the UK<br />

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What can we learn from Christmas 2010?<br />Vital to start early<br />Treat Christmas as two-stage event: before and after<br />A clear pre-Christmas peak in sales – 6th December – but no clear post-Christmas peak due to staggered sales<br />Mondays pre-Christmas always see sales spikes<br />Focus on vouchers, downloads and advertisers with mobile tracking when last order date passes<br />Expect the unexpected!<br />

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Partnership</li></li></ul><li>Pitfalls<br />Over Incentivisation <br />What is likely to be the natural uplift in sales over this period?<br />Understanding the actual cost of promotions– looking beyond the sale<br />Publishers over incentivising customers<br />25<br />

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Pitfalls<br />Neglecting the longtail<br />Pareto 80/20 rule<br />Longtail a top affiliate in their own right<br />Christmas incentives should be inclusive of the longtail<br />26<br />

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How mobile is driving the trends<br />5% of Affiliate Window’s sales now come from mobile devices<br />Some advertisers drive up to 12% of their affiliate sales through mobile<br />iPad overtook iPhone in sales for the first time on Christmas Day 2010<br />The iPad outstrips other devices and the network in general on click to sale conversions<br />Affiliate mobile applications becoming mainstream as affiliates build brands<br />